Subscribe To The Expensive Move Nintendo Made To Meet Switch Demand Updates
While the Nintendo Switch was nearly impossible to find at launch, that wasn't from a lack of effort on Nintendo's part to get as many consoles on shelves as humanly possible. To achieve their shipment goals, they even employed an uncommon, pricey method.
In short, they shipped a bunch of Switch consoles via plane, rather than relying on sea freight, as is common practice. That might not seem all that shocking but, again, it's not too often a publisher moves that much product by air. The reasons for that are pretty simple: It cost quite a bit more money.
The folks at the Wall Street Journal (via Gamespot) were able to put a rough price on that extra cost. While we don't know how many Switch consoles Nintendo flew around the world, or even where (it's assumed Europe and the United States are a pretty good guess), we do know how much more, per unit, it cost. The answer to that question is 5,000 yen, which translates to about $45.
That's an important figure because it means Nintendo was willing, for at least a limited time, to break with another tradition: making money on the consoles they sell. Usually, console sales are similar to the tried and true razor method. You sell the hardware (the handle in the razor analogy) at as close to cost as you can and make money on the games (the blades). While Sony and Microsoft usually employ this method, even selling consoles at a loss from time to time, Nintendo typically makes a few bucks off of each piece of hardware they sell. Since it's estimated they were making around $40 on each Switch sold, that means they were willing to lose that profit in order to get more consoles on shelves by launch day.
In other words, now we know how they were actually able to over-deliver on their promise. Nintendo stated they planned to have about 2 million Switch consoles ready to roll around the world when the console launched in early March and instead had 2.74 million consoles out the door. Unfortunately, things seem to have slowed down quite a bit by then. Part of that is due to the popularity of the new hardware, sure, but the other part is likely due to the fact that they seem to be settling into a normal pace already. For one, they're not transporting consoles by air any longer, relying instead on the great blue sea. What that means is that every time a random store gets three Switches on the shelf, they disappear almost immediately. We were hoping that supply would be a bit more reliable by now but, then again, this is all still good news for Nintendo.
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